A change to sick pay regulations has left large numbers of convenience store owners feeling distinctly off colour.
Employers’ ability to recover Statutory Sick Pay from HMRC was removed on 6 April, meaning that store owners must now fork out £87.55 a week for staff who are off sick for extended periods, in addition to paying the wages of replacement staff.
The change was a “classic example of the government pushing more employment costs and responsibilities onto employers,” said Rural Shops Alliance chief executive Ken Parsons.
“For Tesco this is simply an annoyance, but it could have a dramatic impact on a small store owner faced with the long-term sickness of a member of staff,” he added.
”When you run a small business you need to plan your finances and you can’t plan for when someone is going to be off sick or for how long. Having to pay that much out would be a significant extra burden. ”
Mike Dorey, Eastcombe Village Stores, Gloucestershire
”We employ 34 people so clearly this is a concern for us as it could end up costing us a vast amount of money, not to mention time. ”
Richard Williams, Williams Somerton, Somerset
Retailer Lilian Hyde of GN Hyde & Son in Llandudno, North West Wales, said she had been forced to reduce staff hours so that no employee worked more than 16 hours a week, thus remaining below the eligibility cap.
“It’s absolutely horrifying. Paying out £87.55 a week in addition to the wages for a replacement member of staff would ruin us completely, so we just can’t take the risk of it happening. It’s a nightmare having to manage all the shift changes and upsetting to turn down staff who would like to work extra hours, but we don’t have any other choice,” she told Convenience Store.
Association of Convenience Stores public affairs director Shane Brennan said: “We are deeply disappointed that the government went ahead and imposed this measure. It leaves retailers in a difficult situation having to cover for absent employees and pay out additional costs.”
Employers must pay SSP to any member of staff who earns at least £111 a week (16 hours of work at the current national minimum wage rate of £6.31) and has been off for four or more days in a row (including non-working days).
To find out more about the changes, visit www.gov.uk/employers-sick-pay.
Counting the costs
The changes to SSP law are the latest in a line of costly legislative burdens for small firms.
According to the Forum of Private Business (FPB), the average small business’ annual compliance bill has soared by £713 above inflation - with compliance bills for firms with fewer than nine employees having reached £164 per employee.
The FPB blamed the rise on payments to external contractors as a result of costs associated with the new Real Time Information payroll process, auto enrolment and advice on sector-specific regulations.